Investment Strategy Overview - The report highlights a significant investment opportunity in the electronic industry, driven by the dual forces of domestic cloud computing capabilities and the explosive growth of AI at the edge, marking a pivotal moment for the sector leading up to 2026 [1] Semiconductor Manufacturing - Capital expenditure in semiconductor manufacturing is set to reach new heights, with domestic fabs expected to experience a dual expansion in memory and advanced logic production in 2026, supporting a sustained high level of demand in the wafer foundry sector [2] - The semiconductor equipment sector is anticipated to witness a "β+α" resonance market, with a focus on industry leaders benefiting from expansion dividends and companies like Jingzhida and others that have a clear technology realization logic [2] Cloud Computing Chips - Global cloud service providers (CSPs) are increasing capital expenditures, with the combined capital expenditure of the four major overseas CSPs (Google, Amazon, Microsoft, Meta) reaching $97.9 billion in Q3 2025, a 10% quarter-on-quarter increase [5] - Domestic cloud computing is catching up, with significant growth potential as demand for computing power rises, particularly from leading firms like ByteDance [5][17] - Companies such as Cambricon and Haiguang Information are recommended for investment due to their expected performance release in the domestic computing power sector [5][17] Edge Computing Chips - The strategic importance of edge AI is rapidly increasing, with major tech companies integrating AI models into core products, enhancing the demand for System on Chip (SoC) manufacturers [7][36] - Companies like Amlogic and RichChip are positioned to benefit from the growing demand for edge AI applications, particularly in smart home devices [7][39] Storage Sector - The storage sector is experiencing a strong cyclical upturn, with DRAM and NAND indices showing significant increases of 101% and 79% respectively from September to November 2025 [5] - Major CSPs are increasing their procurement of storage products, leading to a sustained rise in storage prices and creating a "super cycle" in the industry [5] Analog Sector - The analog sector is seeing growth driven by increasing automotive demand, although price pressures are expected to persist [5] - The sector is poised for opportunities related to new AI applications as the industry evolves [5] Consumer Electronics - AI is driving a transformation in terminal interactions, with a notable shift in smartphone upgrades and the emergence of AR products [7] - The AR glasses market is expected to see significant growth in 2026, with major companies like Meta and Apple launching new products [7] PCB/CCL Market - The PCB/CCL market is set to benefit from increased capital expenditures by global cloud providers, with the AI PCB market projected to reach 60 billion yuan in 2026, a 229.8% year-on-year increase [7] - The introduction of low-loss materials and advanced architectures is expected to significantly enhance the value of PCB products [7]

Core Viewpoint - Tencent has publicly stated that it has no current plans to produce AI chips and does not intend to enter this field in the future, contrasting sharply with other major Chinese tech companies that are accelerating their investment in self-developed AI chips in response to U.S. export restrictions on NVIDIA chips [1][6]. Group 1: Tencent's Strategy - Tencent is implementing a full-stack optimization strategy to alleviate the tight supply of computing power by integrating various types of chip resources to build a cost-effective AI computing support system [1]. - Tencent's response to U.S. export control policies focuses on technology optimization and resource integration, continuously improving algorithms and building efficient computing clusters to maximize the use of existing computing resources for model training [1]. - Tencent is strategically differentiating its business operations between the domestic and overseas markets, increasing the proportion of domestic chip usage while collaborating with local partners for hardware support in international markets [3]. Group 2: Investment and Infrastructure - Tencent plans to invest $150 million to build its first data center in the Middle East, located in Saudi Arabia, and will also establish a third data center in Osaka, Japan, to enhance its global computing network [3]. - Tencent's international business segment has maintained double-digit growth over the past three years, indicating strong performance in its cloud services [3]. Group 3: Competitors' Movements - Other major Chinese tech companies, such as Huawei, Baidu, and Alibaba, are accelerating their self-developed AI chip initiatives in response to external restrictions, with Huawei successfully developing the Ascend series processors and Baidu applying its Kunlun P800 chip in its ERNIE language model [6]. - Alibaba has recently launched a new AI chip that significantly improves performance over previous models, aiming to fill the gap left by NVIDIA's export restrictions in the Chinese market [6].